WP%2003%20ethics%20Students - Chpt 3: Professional Ethics...

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1 of 9 Chpt 3: Professional Ethics Omit: “Ethics for Internal Auditors” bottom p. 89-91 The AICPA Code of Professional Conduct is divided into four parts: 1. Principles - Stated in philosophical terms. See p. 69-70. General in nature. Not enforceable. Responsibilities - exercise sensitive professional and moral judgment Public Interest - honor the public trust Integrity - perform responsibilities with the highest sense of integrity Objectivity and independence - impartial, unbiased, and Independent. Free of conflicts of interest and independent in fact and appearance Due care - diligence, competence, thorough, prompt Scope and nature of services - observe the principles when considering the scope and nature of services provided. 2. Rules of Conduct - Specific rules. Must be followed by every CPA who is a member of the AICPA. Failure to follow rules can result in either the requirement of remedial or corrective action (for less serious offenses) or expulsion from the AICPA (for more serious offenses). Would not keep you from practicing, but would be bad for reputation. Published in the CPA Newsletter. Similar rules of conduct have been acted by most CPA Boards in the various states. Failure to follow state CPA Board rules can lead to the loss of the CPA certificate and the license to practice. States’ rules may even be more restrictive than the AICPA’s. 3. Interpretations - Answers to questions that are frequently put to the AICPA from practitioners. By the Division of Professional Ethics of the AICPA. 4. Ethics Rulings - Specific factual circumstances addressed by the executive committee of the Division of Professional Ethics. AICPA Rules of Conduct (p. 71) Section 100: Independence, Integrity, and Objectivity Rule 101—Independence Rule 102 —Integrity and Objectivity Section 200: General and Technical Standards Rule 201 —General Standards Rule 202—Compliance with Standards Rule 203—Accounting Principles Section 300: Responsibilities to Clients Rule 301 —Confidentiality of Client Information Rule 302 —Contingent Fees Section 400: Repealed Section 500: Other responsibilities and Practices Rule 501 —Acts Discreditable Rule 502 —Advertising Rule 503 —Commissions and Referrals Rule 504—Deleted Rule 505—Form of Organization and name Rule 101—Independence A member in public practice shall be independent in the performance of professional services as required by standards promulgated by bodies designated by council.
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2 of 9 Interpretation 101-1 provides specific guidance —pp. 72-73. Independence shall be considered to be impaired if: A. During the period of the professional engagement a covered member 1. Had or was committed to acquire any direct or material indirect financial interest in the client.
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This note was uploaded on 11/22/2010 for the course BUSINESS 4230 taught by Professor Dee during the Spring '10 term at Community College of Denver.

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WP%2003%20ethics%20Students - Chpt 3: Professional Ethics...

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